February 2014

The US tax reform discussion draft from Dave Camp, chairman of the House Ways and Means Committee, achieves two key goals for business, says John Engler, the leader of one of America’s most influential employers’ organisations: a corporate tax rate of 25% and a modern tax system.

While this month’s interim Budget in India was merely a vote-on-account and went largely unheralded in the corporate tax world, Finance Minister Palaniappan Chidambaram did make pledges regarding the Direct Taxes Code (DTC) and goods and services taxation (GST).

Tax departments around the world are facing growing demands to do more with fewer resources. Joel Walters, inbound tax leader for PwC US, explores how in-house teams can successfully navigate the new corporate tax landscape in light of increased scrutiny on tax planning processes, reporting requirements and compliance initiatives.

Alcoa’s operations in Europe, Middle East and Africa run from Norway in the north of the region to South Africa in the south. It is a wide area of responsibility for the EMEA tax department of the global engineering and manufacturing company, which makes it crucial that when it uses external advisers, it finds the right ones to help it contribute to the company’s objectives.

Inspired by the Fair Trade Mark, the Fair Tax Mark is a new standard to promote companies pursuing ethical tax policies and reward good behaviour among taxpayers. Richard Murphy, founder and technical director of the campaign, explains why it is necessary.

Tax departments around the world are facing growing demands to do more with fewer resources. Joel Walters, inbound tax leader for PwC US, explores how in-house teams can successfully navigate the new corporate tax landscape in light of increased scrutiny on tax planning processes, reporting requirements and compliance initiatives.

Last year saw the pace of tax policy changes across the world step up a gear. But the tax revolution is far from complete. From BEPS to US corporate tax reform and the EU financial transaction tax, many of the key initiatives that dominated the headlines in 2013 will continue to gather pace in 2014.

The US Treasury and Internal Revenue Service have responded to industry concerns in the final and temporary regulations for the Foreign Account and Tax Compliance Act (FATCA). However, the effective date of July 1 2014 was not changed.

On January 15 2014, the Canada Revenue Agency (CRA) launched a new Offshore Tax Informant Program, or OTIP, under which awards may be paid to individuals providing information to the CRA about major incidents of international tax non-compliance.

Jim Flaherty, Canadian finance minister, continued the theme of recent years when he delivered his 2014 Budget speech last week, focusing on improving the integrity of the country’s tax system. He also announced measures that could see Canada acting unilaterally on issues being discussed at OECD level.

Algirdas Šemeta, the European Commissioner for Taxation, Customs Union, Audit and Anti-Fraud has expressed concern that the financial transaction tax (FTT), despite receiving majority support from MEPs and voters, has been hindered by excessive criticism from lobbyists in Brussels.

Max Baucus’ move to become US ambassador to China has now been confirmed. As chairman of the US Senate Finance Committee (SFC), Baucus’ name had become synonymous with the issue of US tax reform. Ron Wyden, Oregon Democrat, will take up the SFC chairmanship.

In the context of the US’s Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks, discerning a banker’s state of mind is often difficult and always an after the fact determination.

On January 2 2014 the Federal Ministry of Finance issued a 62 page long notification in which it specified the principles for the allocation of goods and services to the business, writes Eveline Beer of KÜFFNER MAUNZ LANGER ZUGMAIER.

The European Court of Justice (ECJ) has decided, in the Hervis Sport case, that a turnover tax that disadvantages linked undertakings, within a group, to companies established in another member state constitutes indirect discrimination.

The Supreme Court of India in a recent judgment (Sasi Enterprises v Assistant Commissioner of Income Tax Criminal Appeal No 61/2007) categorically declared it is a taxpayer / assessee’s statutory obligation to file a tax return and non-filing is an action liable for prosecution.

Palaniappan Chidambaram, India’s finance minister, said this week that the Direct Taxes Code (DTC) and goods and service tax (GST) Bills will not be passed in the current Parliamentary session, despite telling International Tax Review in December that he was hopeful of passing the heavily-delayed DTC Bill in the winter session.

As the planning opportunities for avoiding, deferring or sheltering taxable gain on asset dispositions continue to be curtailed through changes in tax law and administration, taxpayers have turned to partnership transactions to accomplish these goals. Michael Sabbah, associate at Wachtell, Lipton, Rosen & Katz, explains why new proposed IRS regulations could limit the use of these types of transactions.